Magma Fincorp Q3 Review - Strategic Reorientation Yielding Results; Value Unlocking To Drive Rerating: ICICI Securities  
A man counts Indian rupee banknotes in Varanasi. (Photographer Dhiraj Singh/Bloomberg)

Magma Fincorp Q3 Review - Strategic Reorientation Yielding Results; Value Unlocking To Drive Rerating: ICICI Securities  

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Magma Fincorp Ltd.’s Q3 FY21 earnings were a mixed bag as rise in vulnerable pool (stage-two plus stage-three) and higher credit cost (more than 500 basis points) were offset by stringent cost controls and better net interest margins (due to focus on high-yielding products).

Month-on-month improvement in collection efficiency (97% in January 2021) and overall provisioning buffer of 5.3% suggest that stress should peak out soon.

Strategically, the company has stopped sourcing low-return on assest products (namely new cars, commercial vehicle, construction equipment, etc.) and will deploy the capital release towards focused products (used assets, tractors, housing).

Click on the attachment to read the full report:

ICICI Securities Magma Fincorp Q3FY21 Results Update.pdf

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